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No lockup on gas in theWest

On federal lands in the Rocky Mountain region, the story is gas — natural gas and lots of it. And most of the area’s natural gas is available with minimal leasing restrictions, according to a government survey released in January. Until now, industry and policymakers have not known the extent of regulations preventing the development of oil and gas on these federal lands.

Holding more than 138 trillion cubic feet of proved reserves and technically recoverable natural gas resource, the region is the country’s second largest natural gas reservoir after the Outer Continental Shelf, the Department of the Interior (DOI) study reports.

“This onshore natural gas resource base is enough energy to heat all 55 million homes that currently use natural gas for some 39 years,” says Rebecca Watson, assistant secretary for land and minerals at DOI. Covering almost 60 million acres on land in the interior West, the report analyzed five priority basins that stretch from northern New Mexico to Montana. “We focused our efforts in this area, because this area contains the greatest amount of natural gas onshore and the greatest amount of oil,” Watson says.

A drilling crew makes a hole for a coalbed methane well in the Powder River Basin, Wyo. The Powder River Basin is one of five priority basins recently assessed for oil and gas resources. Photo courtesy of USGS.

As mandated by Congress in the Energy Policy and Conservation Act (EPCA) of 2000, the inventory overlays resource estimates of oil and gas from the U.S. Geological Survey (USGS) and proven reserves from the Energy Information Agency with Bureau of Land Management and U.S. Forest Service information on land leasing restrictions. “What’s unique about this report is that it offers a landscape-level snapshot of where oil and gas resources are located and then what kind of other values or constraints are laid over the top of them,” Watson says.

The results of the EPCA oil and gas inventory are making their way through Capitol Hill, where legislators are already planning hearings to evaluate the study and to discuss potential changes to federal leasing laws.

“Policymakers have wanted to have some sort of a tool that they could use to have an idea of the resources that exist in different areas under federally controlled land,” says a House Resources Committee staffer. According to the inventory, 62 percent of the natural gas resource in the five basins and 57 percent of oil resources are available for development under standard leasing terms, the least stringent leasing category of the 10 analyzed in the report. “This will help policymakers make the determination, over time, whether leasing should take place.” But, the House source says, the inventory is just a first step to analyzing other public lands and also to looking at other development restrictions past the leasing phase.

“These include delays in the permitting and environmental impact study process which prevent timely execution of the lease … and the conflict between producing a subsurface resource when the surface rights are held by someone else,” says a Senate Republican committee staffer. In the next six months, the National Petroleum Council plans to update a previous study and evaluate all impediments to greater oil and gas production on federal lands.

Shirley Neff, an energy economist and former staff member for the Democratic side of the Senate Energy and Natural Resources Committee, says that the EPCA mandate’s intent was to move toward developing an inventory system. “It was made very clear to the agencies by the Senate energy committee, which authorized the ongoing inventory, that it was meant to be a system improvement and not a one-time study.” Policymakers and industry must have continuous information on what domestic resources exist and are available for development, as an issue of energy security, she says.

USGS, which provided key data for the EPCA inventory, continuously assesses oil and gas resources on federal lands. The USGS resource numbers for the five basins, released two weeks before the Interior report, update estimates from the last assessment in 1995.

The message of the latest USGS assessment is clear, says Chris Schenk of USGS in Denver: “Unconventional gas is really the future in most Rocky Mountain basins, rather than the conventional resource.” According to the USGS study, more than 90 percent of the undiscovered gas resource is unconventional, including coalbed methane, what many consider the future of U.S. short-term natural gas demand (Geotimes, November 2002).

Although the prior assessment came out in 1995, the work for it actually took place in 1992. Over the past 10 years, industry has drilled thousands of new wells. “We have much better geologic definition now of the unconventional oil and gas plays than we did 10 years ago,” Schenk says. The Powder River Basin alone, for example, holds a technically recoverable mean estimate of 14.3 trillion cubic feet of coalbed methane gas — a huge jump over the 1.1 trillion cubic feet estimated in the 1995 assessment.

Romey Flores, USGS geologist and lead researcher for the Powder River Basin, says that they have learned much more about the geology of the coal bed itself. “Originally, there were only two or three coal beds that were generating gas; but we’ve found that other, deeper coal beds seem to be generating more gas,” Flores says. The original developments were from the shallow margin of the basin.

Also, Flores adds: “The coal beds where coalbed methane is being produced from in the Powder River Basin is low-rank coal. There is a potential then of coalbed methane development of other low-rank coals in the other basins in the Rocky Mountain region as well as worldwide.” Usually, most, if not all, coalbed methane production comes from high-rank coal, which has a higher heat or calorific value. Flores and others at USGS are currently working on other coal basins with lower rank coal, hoping to find more potential gas.

Lisa M. Pinsker


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